Understanding Geomarketing: Geofences vs. Beacons

September 26, 2014

You’ve probably heard of using IP addresses to target your audience by physical location…and maybe you pushed out your message to someone who actively checked in to your space on Foursquare or Facebook. Mostly due to ever-changing mobile technology, “Geomarketing”, or targeting your audiences based on geographic location, is one of the most quickly evolving trends in marketing.

The idea of geomarketing isn’t new. For years, marketers have been able to purchase mailing lists and/or set up pay-per-click online campaigns based on zip codes or a radius around a specific geographic location. What’s different about recent innovations is the ability to message directly to consumers on their personal mobile devices based on their proximity to a physical location.

This type of mobile-based geomarketing technology takes several forms and can be used for countless applications, from pushing coupons or product information to helping a customer find his/her way around a retail location.

Two of the main forms of geomarketing that you will probably experience soon, if you haven’t already, are geofencing and beacons. Both of these technologies use a wireless signal to pinpoint a person’s proximity to a particular location, such as a retail store, but there are important distinctions between the technologies and how they can be used.

Geofencing
Geofencing is the practice of establishing an electronic perimeter around a specific geographic point using GPS technology, which requires satellites and cell phone towers to communicate with mobile devices. When a potential customer enters or leaves this perimeter, the geofence triggers an action, such as a timely text message or promotion alert sent directly to the customer’s mobile device.

For a geofence to work, customers must download an app, install it and opt in to receive notifications. There are common apps that can be set up to use geofences, or businesses can set up and promote proprietary apps. Because of their reliance on GPS, geofences work best outdoors and are less accurate than beacons for pinpointing a person’s exact location.

Beacons
Beacons are an evolved form of geofencing. The main difference between geofencing and beacons is that beacons use bluetooth technology rather than GPS to determine a person’s proximity to a specific location. This has several implications:

There are many different types of beacons available from popular brands, including Motorola, Google and Apple, and they all work a little differently. They usually require hardware (beacons) that must to be installed at the location, but in some cases, like Apple’s iBeacon, they can be built into existing devices. The beacon communicates through an app that customers must install on their devices and allow to receive notifications.

Beacons allow a very accurate estimation of where a customer is located – within inches. A retailer could use this technology to provide messages directly to a customer shopping in a particular aisle or standing in front of a particular display – think coupons, product reviews or click-to-buy. The retailer could also help lead a customer to a particular item within a store.

Because beacons are small, battery powered devices themselves, they are portable and can be used as a mobile geofence. They could be placed on a moving object, such as a bus or a cab.

Beacons allow a business to track a person’s activity as he or she moves in or around a space. Creepy as that sounds, it’s not so different from web analytics (marketers have been tracking customers’ movement through websites for years). Businesses can learn a lot from this type of data, including where, when and how to display messages and what messages resonate best with customers.

Interested in learning more about what geomarketing can do for your business?Contact Robot Creative for more information.